Why digital banks are becoming mobile service providers

A compelling neobank operator uses mobile connectivity as a cross-leveraged product.

Digital banks branching into the mobile virtual network operator (MVNO) space still face challenges to achieving commercial viability despite reduced entry barriers, says data and analytics company GlobalData.

There is a small yet growing group of branchless digital branches who are entering the MVNO space as operators, GlobalData observed. Advancements such as e-SIM adoption and turnkey mobile virtual network enabler or MVNE/MVNO platforms have reduced barriers to entry.

Banks foraying into this space is nothing new. They have long used basic prepaid mobile offers to extend customer relationships and monetize existing distribution, said Natasha Rybank, principal analyst, Global Telecom Consumer Services, GlobalData.

But digital banks who wish to thrive in this space should look beyond just making mobile-related offers.

“Beyond straightforward mobile payments capability, a compelling neobank MVNO play requires a broad, mobile-first financial platform that tightly integrates app-centric account control with adjacent digital services—travel, loyalty, and payments—so that mobile connectivity becomes another cross-leveraged product in a unified customer proposition,” Rybank said in a report on 14 October 2025.

Benefits of a digital bank MVNO include an embedded customer base, integrated app management of multiple services, data-driven loyalty mechanics, and payment-linked perks.

“This daisy-chain approach can accelerate customer acquisition and deepen retention, potentially posing a more direct competitive threat to telco mobile revenues than legacy retailer MVNOs that rely primarily on physical distribution and basic prepaid offerings,” Rybank added.

Major carriers have already leveraged eSIM normalization to launch international roaming and travel-focused digital brands such as Orange Travel, eSimFLAG, and Vodafone Travel eSIM, for example.

These demonstrate new routes to revenue beyond core connectivity, said GlobalData.

Incumbent telcos, meanwhile, are making use of partnership, wholesale MVNE models, and targeted digital spin-offs. These offer “pragmatic responses to emerging neobank competition,” said GlobalData.

“Still, select, well-capitalized neobanks with strong user bases and mature product ecosystems will pilot and scale MVNO offerings, but widespread disruption of carrier revenues is unlikely without clearer proof points of sustained mobile customer migration and monetization from these new breed neobanks,” Rybank said.